Not all investments in digital appear to pay off—a selective approach is essential when digitizing the enterprise.
December 2014 | byGiuliano Caldo, Matthias Hoene, and ’Tunde Olanrewaju
Digital technology is transforming the financial-services industry, and banks face the challenge of fully digitizing their businesses. To do so, they must decide where to invest in digital and how to justify these investments amid rising IT budget pressures.
Our research on the state of digitization among financial institutions in Eastern and Western Europe suggests where digital investments are best placed,1 most notably in automation of back-office processes and in sales-side analytics. In contrast, for example, investments in multichannel integration do not appear to have been as effective for these banks. We reached our conclusions by measuring factors across four dimensions: first, the level of digital enablement provided by IT with respect to end-to-end automation of processes, sophistication of digital channels, and analytics for decision making; second, the level of IT spending; third, the maturity of IT practices; and fourth, the bank’s level of overall cost and profitability.
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